Saving Money

I've decided to cancel my ancestry.ca subscription.  This was the last online subscription I was holding on to.  It was $11.95/month.  I haven't done any research for a couple of months and figure that when I'm ready to re-focus on it, then I can look at subscription fees again.

Networth Update

What?!

Yeah!  My student loan payments went through yesterday, and it pushed my networth to POSITIVE $596

That's amazing!!

Canadian Taxes - Where Does Your Money Go?

JD over at Get Rich Slowly posted an article  today about the United States of America's taxes.  I thought I would dig up a little information on Canadian Taxes.

For the fiscal year (2007-2008), Canada's federal government recorded $242.4 billion in taxes and other revenues.  The largest expenditure of that money, is DEBT!  Debt costs our country $33.3 billion dollars, annually.  That's about 14 cents of each tax dollar!  The Department of Finance Canada, actually as a pretty great interactive website that explains where all the money went.  Here's a link!

That link tells us a great story about our federal taxes, but I'm curious about our provincial taxes and our sales tax as well.

I will use my salary as an example of how taxed we, as Canadians, are.  I am currently living in the province of Alberta, and will use their guidelines for provincial calculations.  To make it easier, I will base my calculations on the assumption that I have no RRSP's or other means to reduce my taxable income (which I do)

I have calculated the provincial and federal taxes I will owe on my income based on the rates provided by the Canada Revenue Agency.  Those rates are listed here.

The goods and service tax (GST) is a tax that applies to the supply of most goods and services.  In Alberta, we are charged 5% on top of just about everything we buy.  Assuming that I spend approximately $1,500/month on variable (taxable) consumption.  That would be  $75/month or $900/year spent in GST.

Here's a little graph:

Wow!  Talk about a HUuuuge argument to do as much as you possible can to reduce your taxable income!  Just about $12, 500 of my annual salary is gobbled up by taxes, and that's with fairly conservative estimates!

So how can we reduce our taxable income, so that we pay less taxes?

1. Contribute to RRSPs!!  Keep in mind, this is only a tax deferring vehicle.  You will pay taxes on this money when you take it out after you retire, although in theory at a lower tax rate.
2. Open a TFSA.  Tax free savings accounts are fantastic vehicles for your emergency fund.  Keep in mind that you don't pay taxes on the INTEREST earned.  You do pay taxes on the money deposited each year.
3. Have you been going to school?  There are a great number of deductions available for post-secondary students
4. Do you own a small business?  Look into the ways to reduce your taxable income using business 'write offs'
5. If you already donate to charity, keep and track those receipts, and claim it!

There are so many different ways, however; each person has their own unique set of circumstances.

How do you reduce your taxable income?  Do you think you pay too much, or too little in taxes?

I will be credit card debt free in 3 days!!

Down Payments and Gifts of Equity

I've read on the forums at get rich slowly about 'gifts of equity' which is a term I've only found used in the states.

My understanding is that a gift of equity is a unique way of coming up with a down payment for a home. Basically there is a sale between family members where the current value of the home is listed as well as the price they are selling it for in the sales agreement. The difference between those two numbers is considered a 'gift of equity'. That 'gift of equity' can be used (in the sates) as their down payment on the home.



I have posted this questions on the aforementioned Get Rich Slowly Forums, and also shot it off to Gail Vaz-Oxlade.  I will let you know if I get any good information from either of those sources.  I did call my bank, they had no clue what I was talking about.  I also shot off this question to a couple of mortgage brokers, and got a few responses. 

Response One:

Unfortunately, Canadian law requires all mortgages to have a down payment. There is no recognition of an 'equity down payment' by way of a gift or otherwise. I completely understand where you are going - however our current lending laws don't provide us any options.

Response Two:

Yes, you can use a gift of equity as a down payment in Canada. Please let me know if you require further information

I find it absolutely flabbargasting that I would have two answers that are completely opposite.

Is anyone out there familiar with it?

I will be credit card debt free in 4 days!

Making More Money!

I read Money Funk's post, about 28 ways to make more money, this morning and got an idea.

I'm going to look into becoming an Avon Lady.  There's none that are active in my neighborhood, so there wouldn't be any significant competition.  How do I know that?  I've lived in my current home for nearly three years, and an Avon sales rep (let alone any other door-to-door sales rep) has not yet come knocking.

I don't really know how it would work, but I went to their Canadian website and sent away for some information.  My Great Aunt (who lives in another part of the city) has an Avon lady, so I'm going to see if I can talk to her about it.  See how much money making potential their really is.

I'll let you folks know more about it, as I learn about it too.

Has anyone out there ever done this, or something like it, before?

Friday Morning Funny

Just a fun comic to lighten up your morning:

I will be credit card debt free in 7 days!

A Comparison - How Much Do Your Groceries Cost?

On my lunch break the other day, I was cruising the local news websites and came across an interesting report. CTV Calgary issues a grocery price comparison report each month!

I was fascinated to read it because my brother and I recently had a conversation about how much groceries cost. He shops primarily at Co-op and the farmer's market. I think that he's pretty aware about the costs of things and believed it when he told me Co-op was one of the cheaper grocery stores in town.

Well, that's simply not true - based on CTV Calgary's report.

The premise:

The comparison is done by a home economist as part of an ongoing series on price checks. Once a month, CTV creates a grocery list (which seems to average about 40 items) and compares prices at major Calgary stores. If a store has a particular coupon or sale, that is included in the calculation of the prices.

For an example of the report, the monthly article is here.

I went through each article from January, 2009 through to August, 2009 and created an excel spreadsheet of the results.

Co-op is THE MOST EXPENSIVE STORE! What?!

Superstore was the least expensive, which is acutally not that suprising. The average discrepency between the most and least expensive stores was $51.78. Over the course of the year, that could wind up costing you over $600! Wow!

Now, Superstore is very overwhelming and it has been mentioned by my brother and Lindsay that they choose not to go to Superstore (knowing it's usually cheaper) because you usually wind up spending/buying more items then you had intended. I beleive that could be said about any store if you don't have a list, but i certainly agree that it is a huge store and very overwhelming at times.

Now for kicks, here is that same information presented in a fancy bar graph:

So, thanks CTV for doing a price shopping comparison for me! Now I don't have to. I'm definatly going to try sticking to Superstore, and if, not Safeway it is!

When I started reading I thought that Safeway would be the most expensive. Did any of this suprise you?

I will be credit card debt free in 8 days!